T.C. Memo. 2007-240
UNITED STATES TAX COURT
CRAIG H. BOND AND JENNIFER BOND, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9282-06L. Filed August 22, 2007.
Craig H. Bond and Jennifer Bond, pro sese.
John M. Janusz, for respondent.
MEMORANDUM OPINION
MARVEL, Judge: This matter is before the Court on
respondent’s motion for summary judgment filed under Rule 121.1
1
Unless otherwise indicated, all Rule references are to the
Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code in effect for the
year in issue.
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Background
This is an appeal from respondent’s determination to uphold
the validity of a notice of Federal tax lien filed with respect
to petitioners’ 2001 unpaid income tax liability. Petitioners
resided in Henrietta, New York, when the petition was filed.
Petitioners filed their joint Federal income tax return for
2001. Respondent subsequently commenced an examination of
petitioners’ 2001 tax year and determined a deficiency in
petitioners’ income tax and an accuracy-related penalty under
section 6662. On October 27, 2004, respondent mailed petitioners
a statutory notice of deficiency.
Petitioners failed to petition this Court with respect to
the October 27, 2004, notice of deficiency. Consequently,
respondent assessed petitioners’ unpaid 2001 tax liability and
issued notice and demand for payment. Petitioners failed to
respond to respondent’s request, and on October 5, 2005,
respondent issued to petitioners a Notice of Federal Tax Lien
Filing and Your Right to a Hearing Under I.R.C. 6320.
Petitioners timely submitted a Form 12153, Request for a
Collection Due Process Hearing.
On December 21, 2005, Appeals Officer Kenneth J. Heidle
(Officer Heidle) conducted a conference with Harold Rehm (Mr.
Rehm), petitioners’ representative and 2001 tax return preparer.
However, because Officer Heidle concluded that Mr. Rehm was not
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an enrolled return preparer, no information was provided to Mr.
Rehm at the conference. Mr. Rehm communicated to Officer Heidle
the desire of petitioners to reopen the audit of their 2001
return.
On December 29, 2005, Officer Heidle held a face-to-face
conference with petitioner Jennifer Bond (Mrs. Bond) and Mr.
Rehm. Mrs. Bond raised questions regarding petitioners’ tax
liability for 2001 and reiterated petitioners’ request to reopen
the audit of their 2001 return. Officer Heidle informed Mrs.
Bond that petitioners were precluded from contesting their
underlying tax liability for 2001 because petitioners had already
been given an opportunity to do so when they received the October
27, 2004, notice of deficiency, which Mrs. Bond acknowledged
receiving.
On April 12, 2006, Officer Heidle sent petitioners a Notice
of Determination Concerning Collection Action(s) Under Section
6320 and/or 6330. Officer Heidle determined that petitioners
were precluded from contesting their underlying tax liability and
concluded that respondent could proceed with the proposed
collection action.
On May 16, 2006, the petition was filed. In their petition,
petitioners raised arguments relating only to their underlying
tax liability for 2001.
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On June 13, 2007, respondent filed his motion for summary
judgment. On July 5, 2007, petitioners filed a response in
opposition to respondent’s motion. On July 13, 2007, respondent
filed a reply to petitioners’ response in opposition.
Discussion
I. Summary Judgment
Summary judgment is a procedure designed to expedite
litigation and avoid unnecessary, time-consuming, and expensive
trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681
(1988). Summary judgment may be granted with respect to all or
any part of the legal issues presented “if the pleadings, answers
to interrogatories, depositions, admissions, and any other
acceptable materials, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that a
decision may be rendered as a matter of law.” Rule 121(a) and
(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992),
affd. 17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner, 90
T.C. 753, 754 (1988). The moving party bears the burden of
establishing that there is no genuine issue of material fact, and
factual inferences will be drawn in a manner most favorable to
the party opposing summary judgment. Dahlstrom v. Commissioner,
85 T.C. 812, 821 (1985); Jacklin v. Commissioner, 79 T.C. 340,
344 (1982). The nonmoving party, however, cannot rest upon the
allegations or denials in his pleadings but must “set forth
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specific facts showing that there is a genuine issue for trial.”
Rule 121(d); Dahlstrom v. Commissioner, supra at 820-821.
II. Section 6330(d) Review
Under section 6320(a), the Secretary2 is required to notify
the taxpayer in writing of the filing of a Federal tax lien and
to inform the taxpayer of his right to a hearing. If the
taxpayer makes a request for a hearing under section 6320, a
hearing shall be held before an impartial officer or employee of
the Internal Revenue Service (IRS) Office of Appeals. Sec.
6320(b)(1), (3). At the hearing, a taxpayer may raise any
relevant issue, including appropriate spousal defenses,
challenges to the appropriateness of the collection action, and
collection alternatives.3 Sec. 6330(c)(2)(A). A taxpayer may
contest the existence or amount of the underlying tax liability
if the taxpayer failed to receive a notice of deficiency for the
tax liability in question or did not otherwise have an earlier
opportunity to dispute the tax liability. Sec. 6330(c)(2)(B);
see also Sego v. Commissioner, 114 T.C. 604, 609 (2000). Receipt
2
The term “Secretary” means “the Secretary of the Treasury
or his delegate”, sec. 7701(a)(11)(B), and the term “or his
delegate” means “any officer, employee, or agency of the Treasury
Department duly authorized by the Secretary of the Treasury
directly, or indirectly by one or more redelegations of
authority, to perform the function mentioned or described in the
context”, sec. 7701(a)(12)(A).
3
Sec. 6320(c) provides that sec. 6330(c), (d) (other than
par. (2)(B)), and (e) shall apply for purposes of the sec. 6320
hearing.
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of a statutory notice for purposes of section 6330(c)(2)(B) means
receipt in time to petition the Tax Court for a redetermination
of the deficiency asserted in the notice of deficiency. Sec.
301.6320-1(e)(3), Q&A-E2, Proced. & Admin. Regs.
Following a hearing, the Appeals Office must make a
determination whether the Secretary may proceed with the proposed
collection action. In so doing, the Appeals Office is required
to take into consideration: (1) The verification presented by
the Secretary that the requirements of applicable law and
administrative procedures have been met, (2) the relevant issues
raised by the taxpayer, and (3) whether the proposed collection
action appropriately balances the need for efficient collection
of taxes with a taxpayer’s concerns regarding the intrusiveness
of the proposed collection action. Sec. 6330(c)(3).
Section 6330(d)(1) grants the Court jurisdiction to review
the determination made by the Appeals officer. If the underlying
tax liability is properly at issue, the Court reviews the
determination regarding the underlying tax liability de novo.
Sego v. Commissioner, supra at 610. The Court reviews all other
determinations for abuse of discretion. Lunsford v.
Commissioner, 117 T.C. 183, 185 (2001); Sego v. Commissioner,
supra at 610; Goza v. Commissioner, 114 T.C. 176, 182 (2000).
Petitioners claim that they are not precluded from
contesting their underlying tax liability for 2001 because Mr.
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Rehm did not receive a copy of the October 27, 2004, notice of
deficiency. Petitioners allege that because they executed a
power of attorney placing Mr. Rehm in charge of all matters
relating to their 2001 tax year, respondent erred by not sending
him a copy of the notice.4
Petitioners’ argument is without merit. The power of
attorney designated Mr. Rehm as petitioners’ representative and
authorized him to receive copies of communications sent by
respondent to petitioners. However, the power of attorney
specified that respondent would send all original communications
to petitioners. Under like circumstances we have held that the
failure to mail a copy of the notice of deficiency to a
taxpayer’s representative is not fatal to the validity of the
notice. McDonald v. Commissioner, 76 T.C. 750, 753 (1981); Allen
v. Commissioner, 29 T.C. 113, 117 (1957). Section 6212 requires
only that the Secretary mail the notice of deficiency by
certified or registered mail to the taxpayer’s last known
address. A notice of deficiency is valid if it is mailed
directly to a taxpayer at the taxpayer’s last known address, even
if the taxpayer directs that a copy of all communications be sent
to the taxpayer’s representative and no copy of the deficiency
4
We shall assume for purposes of this discussion that the
Form 2848, Power of Attorney and Declaration of Representative,
signed by Mrs. Bond and Mr. Rehm on Oct. 12, 2004, is valid
despite petitioner Craig Bond’s failure to sign it.
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notice is sent to the taxpayer’s representative. McDonald v.
Commissioner, supra at 752-753; Allen v. Commissioner, supra at
117. Sending copies of the statutory notice to representatives
named in a power of attorney is merely a courtesy to the
taxpayer, not an obligation of the IRS, and in no way affects the
mailing requirements of section 6212. McDonald v. Commissioner,
supra at 753; Houghton v. Commissioner, 48 T.C. 656, 661 (1967).
Accordingly, the notice of deficiency is valid despite Mr. Rehm’s
failure to receive a copy.
Petitioners’ remaining arguments relate to their underlying
tax liability for 2001. The record clearly demonstrates,
however, that respondent properly mailed them a notice of
deficiency for 2001 on October 27, 2004. Respondent attached to
his motion a copy of the notice of deficiency and a copy of the
U.S. Postal Service Form 3877, confirming that a copy of the
notice was mailed to each petitioner on October 27, 2004. The
record does not contain any evidence that the notice of
deficiency was ever returned to respondent nor have petitioners
denied receiving it. Moreover, Mrs. Bond admitted at the face-
to-face conference held on December 29, 2005, and in a January
27, 2006, letter to Officer Heidle that petitioners received the
October 27, 2004, notice of deficiency. Accordingly, we conclude
that because petitioners received a statutory notice of
deficiency, petitioners are precluded under section 6330(c)(2)(B)
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from contesting their 2001 tax liability. Because petitioners’
underlying tax liability is not properly at issue, we review the
determination made by the Appeals Office for abuse of discretion.
As petitioners raise no other arguments pertaining to the
appropriateness of the proposed collection action, we hold that
Mr. Heidle did not abuse his discretion in upholding the validity
of the notice of Federal tax lien filing.
On this record, we conclude that there is no genuine issue
of material fact requiring a trial, and we hold that respondent
is entitled to the entry of a decision sustaining the lien as a
matter of law.
To reflect the foregoing,
An appropriate order and
decision will be entered.